PGA Tour landing $3B SSG investment; puts LIV Golf, Saudi deal on shaky ground
The PGA Tour is expected to receive a big cash injection from a consortium of US sports owners.
Jay Monahan speaks ahead of the 2023 Tour Championship. Photo credit: Keyur Hamar/Getty Images
The PGA Tour is on the verge of a historic $3 billion investment from Strategic Sports Group (SSG), according to Bloomberg and The Wall Street Journal reports.
This initial investment is significant not only for financial reasons, but also because Saudi Arabia’s Public Investment Fund (PIF), a beneficiary of LIV Golf, will not participate. Last June, the PGA Tour, DP World Tour and PIF signed a framework agreement that creates a formal integrated golf agreement.
However, consensus among key golf industry stakeholders is still evolving. While this deal between SSG and the PGA Tour does not include the PIF, Bloomberg reports that SSG and the PGA Tour will continue to discuss ways to include a sovereign wealth fund for Saudi Arabia in the near future.
But Bloomberg also noted that each investment could differ depending on how the talks go. However, LIV Golf has recruited some of the best talent on the PGA Tour, including Jon Rahm and, most recently, world number 16, Tyrell Hutton. Phil Mickelson, Brooks Koepka, Bryson DeChambeau and other high-profile players have plunged into the Saudi-backed past and reaped big rewards for joining the ranks of the pioneers. Each LIV Golf event will feature a $20 million prize pool, and players will have the opportunity to win even more through team events.
Jon Rahm at the 2023 DP World Championship. Photo credit: David Cannon/Getty Images
PIF has more than $700 billion in assets and has invested more than $2 billion in LIV Golf since its launch in 2022.
The PGA Tour responded to these moves by creating a lucrative Player Influence Program (PIP) that raises money and rewards the most popular players. So the tournament was forced to squeeze more capital out of corporate sponsors. Many partners have left due to rising costs, including longtime sponsors Honda and Wells Fargo. However, a country that makes the world powerful through tourism oil cannot compete with foreign independent funds.
That’s why the PGA Tour began negotiations with SSG last fall because it needed more capital to support the circuit. SSG includes Boston Red Sox and Liverpool FC. Team owner John Henry, New York Mets owner Steve Cohen, Atlanta Falcons owner Arthur Blank and Avenue Capital Group CEO Mark Lasry. Lasry owned the Milwaukee Bucks from 2014 to 2023. SSG includes other billionaires.
In addition to massive investments in the PGA Tour, SSG could help the tour retool its business model “to increase profitability and make more money for players,” according to The Wall Street Journal. But if the PIF deal goes through, the PGA Tour will at least get a much-needed investment from SSG.
And a deal with the SSG-backed PIF looks less certain than ever.
